Anti Dumping Measures and

Agreement
Dumping
 ‘Dumping’ is the bringing of a product onto the market of
another country (or customs territory) at a price less than
the normal value of that product.
 Product can be considered ‘dumped’ where the export price
of that product is less than its normal value, that is, the
comparable price in the ordinary course of trade for the ‘like
product’ destined for consumption in the exporting country.
 In WTO law, dumping is not prohibited.
Law on dumping
 WTO law does not prohibit dumping. In fact, since prices of
products are ordinarily set by private companies, ‘dumping’
in and of itself is not regulated byWTO law.
 However, Dumping is to be ‘condemned’ if it causes injury to
the domestic industry of the importing country.
 The essence of the WTO rules on dumping is that Members
are allowed to take certain measures, which are otherwise
WTO-inconsistent, to protect their domestic industry from
the injurious effects of dumping.
 WTO law on dumping and anti-dumping measures is set out
in Article VI of the GATT 1994 and
 in the WTO Agreement on Implementation of Article VI of
the GATT 1994, commonly referred to as the Anti-Dumping
Agreement.
Article VI of the GATT 1994
 Article VI of the GATT 1994 states, in relevant part, that:
 The [Members] recognize that dumping . . . is to be
condemned if it causes or threatens material injury to an
established industry in the territory of a [Member] or
materially retards the establishment of a domestic industry.
 Anti-dumping Agreement further elaborates on the
substantive and procedural laws to be followed while trying
to remedy dumping.
 Case: US-1916 Act
For the purposes of this Article
 a product is to be considered as being dumped
if the price of the product exported from one
country to another
 (a) is less than the comparable price, in the
ordinary course of trade, for the like product when
destined for consumption in the exporting country,
or,
 (b) in the absence of such domestic price, is less
than either
 (i) the highest comparable price for the like product for
export to any third country in the ordinary course of
trade, or
 (ii) the cost of production of the product in the country
of origin plus a reasonable addition for selling cost and
profit.
Calculating normal price
 Article 2.1 of the Anti-Dumping Agreement defines the ‘normal
value’ of a product as:
“ the comparable price, in the ordinary course of trade, for the like
product when destined for consumption in the exporting
country”.
Case: US-Hot-rolled Steel
Article 2.6 of the Anti-Dumping Agreement defines the ‘like
product’ as:
 a product which is identical, i.e. alike in all respects to the product
under consideration, or in the absence of such a product, another
product which, although not alike in all respects, has
characteristics closely resembling those of the product under
consideration.
 Determination of injury
 the competent authorities must establish:
 the existence, or threat, of injury to the domestic industry; and
 the causal link between the dumping and the injury.
 Article 3.1 of the Anti-Dumping Agreement requires that a
determination of injury to the domestic industry:
 be based on positive evidence and involve an objective examination of
both:
 (a) the volume of dumped imports and the effect of the dumped
imports on prices in the domestic market for like products; and
 (b) the consequent impact of these imports on domestic producers
of such products.
Thailand – H-Beams Panel
 the Appellate Body referred to Article 3.1 as an overarching
provision that sets forth a Member’s fundamental, substantive
obligation with respect to the determination of injury.
 Article 3.1 informs the more detailed obligations in
succeeding paragraphs. These obligations concern:
 the determination of the volume of dumped imports, and their
effect on prices (Article 3.2);
 investigations of imports from more than one country (Article
3.3);
 the impact of dumped imports on the domestic industry
(Article 3.4);
 causality between dumped imports and injury (Article 3.5);
 the assessment of the domestic production of the like product
(Article 3.6); and
 the determination of the threat of material injury (Articles 3.7
and 3.8).
 In order to offset or prevent dumping, a contracting party
may levy on any dumped product an anti-dumping duty not
greater in amount than the margin of dumping in respect of
such product.
 Margin of dumping is the price difference determined in
accordance with the provisions of paragraph 1
 Not mandatory for a WTO Member to
enact anti-dumping legislation.
 However, if the government of a Member makes the policy
choice to have the option of imposing anti-dumping
measures, Article 1 of the Anti-Dumping Agreement
governs such measures and specifies that:
 “An anti-dumping measure shall be applied only under the
circumstances provided for in Article VI of GATT 1994 and
pursuant to investigations initiated and conducted in
accordance with the provisions of this Agreement”.
Imposition of anti-dumping measures
 only after an investigation initiated and conducted in
accordance with the Agreement.
 on the basis of pre-existing legislation* that has been
properly notified to the WTO, a determination is made that:
 there is dumping;
 the domestic industry producing the like product in the
importing country is suffering injury; and
 there is a causal link between the dumping and the injury.
Article 18.1 of the Anti-Dumping
Agreement provides:
 No specific action against dumping of exports
from another Member can be taken except in
accordance with the provisions of GATT 1994, as
interpreted by this Agreement.
 Effectively limits anti-dumping measures to:
 definitive anti-dumping duties;
 provisional measures; and
 price undertakings
 Provisional measures
 Article 7 of the Anti-Dumping Agreement
 may take the form of a provisional duty or, preferably, a security,
by cash deposit or bond, equal to the amount of the preliminarily
determined margin of dumping.
 There must be a preliminary affirmative determination of
dumping, injury and causation.
 the investigating authorities must judge that such a measure is
necessary to prevent injury being caused
 during the investigation.
 cannot be applied earlier than sixty days following the initiation
of the investigation
 Application shall be limited to short periods.
 not exceeding four months.
 On decision of the authorities concerned, upon
request by exporters representing a significant
percentage of the trade involved, to a period not
exceeding six months.
Price undertakings
 Article 8 of the Anti-Dumping Agreement.
 As an alternative to imposition of anti-dumping duties.
 after the investigating authorities have made an affirmative
preliminary determination of dumping, injury and causation.
 voluntary on the part of both exporters and investigating
authorities.
 exporter may request the continuation of an investigation
after the acceptance of an undertaking.
 Undertaking would then automatically lapse in the event of a
negative final determination of dumping, injury or causation.
Definitive anti dumping duties
 Article 9 of the Anti-Dumping Agreement governs the
imposition and collection of anti-dumping duties.
 Desirable that it remain optional.
 Article 9 contains the so-called ‘lesser duty rule’, under
which ‘it is desirable’ that duty imposed be less than the
margin of dumping if such lesser duty would be adequate to
remove the injury to the domestic industry.
 Members are required to collect duties on a non-
discriminatory basis on imports from all sources found to be
dumped and causing injury.
 The anti-dumping duty collected may not exceed the
dumping margin.
 investigating authorities must, calculate a dumping margin
for each exporter.
 When that is not possible, anti dumping duty to be imposed
on weighted average dumping margin.
Duration, termination and review
 Article 11 of the Anti-Dumping Agreement establishes
rules governing the duration of anti-dumping measures
and a requirement for the periodic review of any
continuing necessity for the imposition of anti-dumping
measures.
 An anti-dumping duty shall remain in force only as long
as and to the extent necessary to counteract dumping
which is causing injury.
US-DRAMS Panel
 Complainant: Korea
 Respondent: US
 Measure and Product at issue: Anti-Dumping
Duty on Dynamic Random Access Memory
Semiconductors (DRAMs) of One Megabit or
Above from Korea.
 Held: the need for the continued imposition of the duty
must be demonstrable on the basis of the evidence
adduced.
 Article 11.2, first sentence, requires the competent authorities to:
 review the need for the continued imposition of the duty, where
warranted, on their own initiative or, provided that a reasonable
period of time has elapsed since the imposition of the definitive anti-
dumping duty, upon request by any interested party which submits
positive information substantiating the need for a review.